You might wrap the unit around the corner, and on that short side, a full-length cabinet designed to house the instruments...peg-board on the back wall with hooks for guitars, floor space for amps and to stand keyboards up on end, and outlets inside to keep amps and keyboards plugged in. If there's a drum kit, just allot floor space in the room (would the space to the right of the unit, where I think I see a window, be a good place?) to keep it set up. (But the best choice is wherever the instruments get used.)
Then position the TV as far to the right, away from that cabinet, and from the entry door, as is comfortable for your seating arrangement, so that you have enough circulation space to get things in and out. Bi-fold doors might be a good option, so that you have less of a door-swing issue.

See, you're helping already! Thanks,bronwynsmom, I never would have thought to take it around the corner. It's probably a corner that would never get used, too!

Keep 'em comin'!
Anybody? Anybody?

If you do go around the corner, I'd suggest using only lower cabinets with counter space at least 18" along the wall to the left and to the right from the corner, with a carousel inside, like in a kitchen corner...otherwise, you lose a lot of space in the corner that you can't get to. I'd wrap the corner with open shelves above, with an angled bit across the corner, for the same reason. And because you have the tray ceiling, take the high cabinets all the way to the ceiling and tie them in by continuing the crown molding and wrapping the units to the wall (as you have done in the kitchenette).

So if you face the short wall and look left to right, first you have a tall cabinet, then next, a counter and shelves wrapping the corner. Then I'd continue with another tall cabinet (drawers below and maybe glass doors or bookshelves above...depending on what you need to store), and then another low bit for the television, with drawers and one open shelf underneath for things that you need the remotes to communicate with. Then another high bit the same width as the first, for balance and scale, but configured to store what you need to store...drawers for games and puzzles, shelves or cabinets, maybe with glass doors and lights inside...whatever suits your life.

If you break it up like that, it won't seem so massive. I would mirror the wall between the counter and lowest shelf in the corner (like a backsplash) to open the space visually, and I would paint the back walls of any open or glass upper cabinets to match the room's walls, which will also lighten the look. I would run one shelf between the two tall cabinets over the TV about 15" from the ceiling, and half as deep as the cabinets (so it won't loom) to pull it all together.

Boy, it's fun to wantonly spend other people's money!

When you say "Rock Band" are you talking about a real band or the video game?

There's a video game???
I am such a dinosaur!

I was actually speaking of the video game, but the idea worked anyway - even though there's no amp!

Now I want to know all about what you decided to do!